Mortgage Clause Law and Legal Definition
Mortgage clause is a provision in an insurance policy that protects the rights and interests of a mortgagee in a mortgaged property. This clause is entered mainly in situations where the insured property is subject to a mortgage. This clause provides for insurance proceeds that are to be due between an insured and the mortgagee. This term is also known as mortgagee clause. The object of this clause is to indemnify the mortgagee upto the amount of security interest. This clause in effect establishes a separate contract between the insurer and the mortgagee.